Richard North, 02/11/2017  
 


Cursed, as some might say, with a Jesuit education, one is extremely conscious of the nature of lying and the need for the mens rea to turn an untruth into a sin. But one is also aware that there can be more to a lie than the simple perpetration of an untruth.

The short-form catechism which I was obliged to commit to memory as a child firmly denounced speaking falsehoods, but widened out the act to include "default" and "sufferance". To allow a lie to prosper through one's own neglect, or through lack of timely intervention, was as much a sin as to utter false words. Either still deformed to truth.

Thus when, as we saw a few days ago, four senior representatives of the commercial aviation industry sit in front of the transport committee and blandly assure the MPs that they weren't concerned about the effects of Brexit, it was a fair surmise that these people were deforming the truth. They were lying.

To emulate the odious Paxman, who famously worked to the principle of asking, "Why is this lying bastard lying to me?", I find myself in the similar position of asking why these people were lying to us. Even if they weren't telling the "lie direct", by default or sufferance the truth – and certainly the whole truth – is not being told.

I had hoped to have had the full transcript of the hearing in order to pursue the matter further but that was not to be. We must still rely on the video of the hearing – an imperfect medium at best.

Nevertheless, for our purposes, it was enough to have John Holland-Kay, chief executive of Heathrow Airport, tell us of his confidence that we would get a deal because: "From an EU point of view, it is just as much in their interests to have continuity after Brexit as for us". He tells us:
You look at the extreme position where there might be no flights for a period of time, that starts to put at risk the huge value that sits with slots at Heathrow for some of the big European airlines. Lufthansa probably has nearly a billion dollars-worth of value attributed to the slots at Heathrow. That's not something they're going to give up lightly.
The thing is here that Holland-Kay is missing the point. It is not airlines registered with EU Member States which are going to be excluded from the UK – unless the UK Government goes out of its way specifically to write legislation banning these airlines from using our airports. It is UK-registered airlines which are going to be excluded from EU Member State facilities (landing rights, etc), by virtue of their changed circumstances.

We are, then, going to have the apparently absurd position where foreign airlines, which will include those registered by EU (and Efta) Members, can freely avail themselves of UK facilities, but the reciprocal arrangements will have broken down, preventing UK airlines landing at foreign airports (and especially those of the EU/Efta Member States).

Holland-Kay talks glibly of there being "pressure" internally within the EU to make sure that a "sensible pragmatic deal" is put together in the event that there is not an "implementation period" so beloved of Mrs May.

Willie Walsh, backing up Holland-Kay, sees the Secretary of State (David Davis) being optimistic about a deal and thus "shares his optimism that the world will continue as it has". He adds: "There are issues to be dealt with", but he is "confident that these issues will be dealt with well in advance of the beginning of April of 2019".

But the point is, as we know, the outstanding issues can hardly be dealt with before April 2019, for the simple reason that the EU cannot negotiate an air services agreement with one of its own members, and must wait until the UK becomes a third country before it is able to agree terms.

In theory, such an agreement could be constructed in order to be signed in the first seconds of the UK's new life as an independent, as it assumes the status of a third country. But, before that can happen, UK must make the first move – or series of moves.

Unless it is going to remain in the European Aviation Safety Agency (EASA), which Willie Walsh wants – and in any event – it is going to have to rebuild the aviation regulatory structure, transferring powers and obligations from the Commission and EU agencies to the UK government and our own regulatory agencies. It must also rebuild the statute book, plucking the detail from the EU aviation acquis which currently encompasses over 200 legislative instruments.

Some will already have been built into UK law, some will have been partially adopted and some laws have direct effect. The various laws must all be brought together into a single, coherent body of law ready from day one of Brexit to provide the regulatory tools to govern a billion-pound industry.

That, in itself is a monumental undertaking and, if the Government is making any progress in pulling all the strands together, there are no public signs whatsoever of its achievement, all in the context where there needs to be a heavy emphasis on public and industry consultation.

Without a stable regulatory base – fully in conformity with international treaties and compatible with EU law – the Commission will not be in a position to conclude any agreements with the UK. And, to that effect, it will need sight of the final UK code well in advance of Brexit day, in order to satisfy itself and legal obligations are fulfilled.

Any cautious, sensible CEO, vested with the responsibility of managing billion-pound businesses, would know this. And, supposedly, we had four such people sitting opposite the select committee. They must know that the regulatory infrastructure is not in place, and neither are there the systems or the people readily available. Aviation regulators – like customs officials – don't grow on trees.

Then there is the minor matter of the TCO approvals, which must be in place before the EU or – as the case may be – individual member states can give permission for UK airlines to fly to destinations in the territories of EU Member States.

In fact, the Third Country Operators legislation came full in force on 26 November 2016, as the US Authorities have noted, complete with the 30 day minimum notice required to submit applications.

Are we really to accept that the leaders of two major airlines are not aware of this provision, and do not realise that, until UK-registered airlines have their TCO approval, they will not be able to operate in the territories of EU Member States? But, if they do know this, then they must know that there has to be an enforced 30-day break from 30 March 2019, before UK-registered airlines can operate fully overseas.

As regards non-EU territories, to say the system is complex is no exaggeration. While, as we noted, the Commission has some exclusive competences in relation to bilateral air service agreements with third countries, individual member states may still make their own deals.

We thus end up with a mixed situation where some deals, such as the EU-US "open skies" agreement, and the EU-India air services agreement are made by the Commission on behalf of all Member States. In other cases, we get the likes of the UK bilateral agreements with Ukraine and Hong Hong.

There is no dispute that the agreements made by the Commission will cease to apply when the UK leaves the EU, and will thus have to be replaced. Willie Walsh is confident that the EU-US agreement will be replaced within minutes of our leaving.

But what is not fully appreciated is that many (if not all) of the UK bilateral agreements will have to be changed. As it stands, they are negotiated and agreed in conformity with EU law, specifically Regulation (EC) No 847/2004, which requires them to include specified EU provisions.

By a bizarre stroke of fate, the inclusion of these provisions – and in particular the conditions which a UK airline must meet in order to come within the terms of the agreement – means that, when the UK leaves the EU, the agreements can no longer be applied. In each case, there are grounds for either party to withdraw from the agreements.

However, what may then follow from these agreements ceasing to apply is that the route rights (see 4.1-2. Caution, long file), which are usually annexed to air service agreements, will also fall. This could lead to a free-for-all, with aviation partners seeking to negotiate improved route rights (sometimes called traffic rights) to the UK, with the risk of delay before agreements are replaced.

Yet, neither the TCO nor the route rights issues were bought up by this select committee – or the need to renegotiate bilateral agreements. However, in an earlier House of Lords report, we saw Ryanair asserting that "traffic rights underpinning the bulk of air traffic to/from the UK will no longer exist". And with a bilateral UK-EU air services agreement, "specific political consent" would "be required for existing traffic rights to remain available".

In that select committee, the airlines that gave evidence (including EasyJet) argued forcefully that the aviation sector should be prioritised, and that negotiations on a comprehensive bilateral aviation services agreement should be kept separate from the wider negotiations on withdrawal and the future UK-EU trading relationship.

The committee noted that a distinct bilateral deal in this area may be in the mutual interests of the UK and EU – without noting the need for the wider bilateral deals with other third countries. It did observe, though, that negotiations on aviation services "will still be just one element within a wide-ranging and immensely complex negotiation".

If we were to rely strictly on evidence – bankable evidence in the public domain – that the government had a grip on this issue, then we would have to conclude that there was room for considerable alarm. And, where we do rely on evidence in the public domain, we must also conclude that it is extremely unlikely that UK Airlines can keep flying overseas in the immediate aftermath of Brexit.

And, if that is the case, we really do have to ask why those lying bastards are lying to us.






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